Advantages And Disadvantages Of Co-Marketing Agreements

Decent Essays

As explained, joint ventures require high commitments and partner to commits real capital and operate the business. On the other hand, co-marketing agreement just requires both parties to commit to marketing and distribution interference. Therefore, firms must give enough attention to the commitment part.
Management in co-marketing agreements depends on the companies' efforts. Both parties have contributed time and resources. However, the appointment of managing in joint ventures are from one or all the joint ventures. Additionally, joint ventures often require independent managers in many cases, this makes joint ventures more valuable because of the efforts of the all joint ventures not like efforts of the companies in co-marketing agreement. …show more content…

There are many types of advantages and disadvantages choosing over one another. I am going to mention 3 types of advantages, additional resources, market entry and equity value forming joint venture vs co-marketing and 3 types of disadvantages, loss of control, a difference of unwinding JV and no exit …show more content…

By doing so, obligations of a smaller party are allowing to have some of its costs supported by its larger partner. In co-marketing, the larger party is going to undertake activities that help the smaller party but, it doesn’t include the real capital so it makes joint venture beneficial for smaller parties.
The difficulty of entering a foreign market is harder in co-marketing situations compared to the joint venture. Regulations of most countries require venturing with a local partner. In these cases, co-marketing is not enough to enter a foreign market. This is why expansion in joint ventures are more successful than co-marketing agreement.
A successful joint venture must increase the value of its individual partners. Additionally, if the joint venture is highly reliant on one of the partners and mostly building value in that partner, there is going to be an opportunity for the others to connect their equity in the joint venture that is the key partner of the venture. This kind of events cannot take place in co-marketing so it makes joint venture beneficial for all partners that are tied to the joint venture.
There are also disadvantages of joint ventures against

Get Access